from the that's-one-way dept

We all know that many game companies are really upset about being locked out of the used games revenue stream. Warner happens to be one of those companies. With the release of Batman: Arkham City, Warner is giving a free code to new game buyers that lets the gamer play as Catwoman during the game. If you buy the game used, you will need to buy a new code to access Catwoman. That is if you buy it used anywhere other than GameStop.

According to a memo sent to Kotaku, Warner and GameStop have partnered up to give free codes to buyers of used copies of Batman. Granted, GameStop is most likely paying for these codes for the customer and is most likely getting them at a discounted rate. This happens to be a great deal for both companies and even some customers. Warner gets the satisfaction of capturing used game revenue with a reduced risk of customers deciding not to buy the redemption code. GameStop gets a leg up on the competition which don't have the same deal. Finally, customers of GameStop don't have to shell out the extra cash to play as Catwoman.

This is an interesting move on Warner's part. GameStop is the poster child for the evils of used games, according to many games industry veterans. However, even the toughest critic of GameStop's policies recognizes the power this one brand has over the game consumer, thus the deal. If GameStop is willing to make such a deal with Warner, would they be willing to do the same with other companies such as EA or Ubisoft?

Of course, there are additional ramifications to consider. How will this affect the relationship with other game stores, both in and outside the US, which don't have the same leveraging power? Will those smaller stores be coerced into deals that are not as sweet for them and their customers? Regardless of the ramifications, it is nice to see a company actually be proactive about capturing used games revenue rather than just complain and punish players. Why can't more companies act this way?

from the time-to-repeat-that-lesson dept

Warner Music Group's chairman Edgar Bronfman is no stranger to failing to see the big picture when it comes to online music. After all, back in the summer of 2000 (when he owned Universal Music), Bronfman was the first music exec to rant and rave about Napster and say he was preparing an army of lawyers to start suing people for downloading music. In retrospect, many now admit that Bronfman's declaration of war on Napster kicked off the recording industry's problems. It was clear then that Bronfman simply did not understand the economics of digital goods, and in the eight intervening years, it appears he hasn't learned very much. While he's dabbled in digital music, the strategies always come back to him trying to control how the music is used, providing less value for music fans. Amusingly, he then complains that downloadable music isn't easy enough. Of course, the only reason that's true is because of the restrictions he insists must be included. In discussing Warner Music's latest earnings, Bronfman complains about the ubiquitous nature of music, and insists that the strategic response is to create additional artificial scarcity. This is exactly the opposite of what he should be doing. All that does is shrink the market, piss off potential customers and create wide open opportunities for competitors to better serve the market. Ubiquity isn't a problem -- it's an opportunity. There are plenty of ways that Bronfman and Warner Music could embrace that ubiquity, expand the market, increase the value and profit handsomely from it. But, instead, Bronfman seems stuck on his failed plan from the summer of 2000, and yet another opportunity will be squandered. Update: Then again, news is coming out that Universal Music will at least experiment with DRM-free music "for a limited time." That's a step in the right direction, just 8 years too late.

from the protection-money dept

A service called Imeem launched a little while back, and it allowed users to build playlists of music, videos and photos and share them with their friends. Despite the fact that it didn't offer any way to download copyrighted music, Warner Music sued Imeem, saying it was making money on "the illegal use of free music." How quickly things change: Warner has now dropped the lawsuit and licensed its catalog to Imeem, in exchange for a cut of its ad sales. Paidcontent says the deal is part of a trend of media companies showing a willingness to cut deals with these sorts of companies, "having decided its better to bring in revenue" than fight in court. But looked at another way, Warner is charging Imeem for the privilege of promoting its music. It paid its lawyers to threaten the company with a lawsuit and hammer out this licensing/revenue share deal, when instead, it could have simply let Imeem be and embraced the promotional value of its own content. It's pretty unlikely that Imeem will deliver significant revenues to Warner; changing how it perceives its own content and evolving its business model seems the wiser long-term bet.